Thursday, August 4, 2011

"Take Emotion out of the Equation"

This is a quote from a commentator on CNBC after a 500 point drop of the Dow Jones Industrial Average. It would be great if we could take emotion out of the equation, but most business decisions will be driven by the emotion and not the market research numbers. While markets and emotions lurch and lean, a good market research report dispassionately analyze the numbers.

Ninety Nine percent of the S&P 500 declined just before the CNBC commentator’s pronouncement. Is it possible that every company out there is over-priced? Of course not.

It’s all about the emotion. While the market was plunging the Mid-Year National Small Business Association report found that 88% of small-business owners anticipate a flat or recessionary economy in the coming year, leading to a growing lack of confidence.
Small business owners pointed to the growing U.S. debt as the number one challenge facing their business.

Positive developments from the survey show that small businesses had “modest gains” in employment resulting in the lowest net decrease in employment since 2008. Hiring projections were also up.

When companies look at what they can control -- their business -- they're bullish, when they look at the world around them and the things they can't control, emotion sets in.

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